Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q4 2022 Earnings Presentation
46 slides from Penske Automotive's earnings presentation, Feb 8, 2023
Slide 1: Fourth Quarter and Full Year 2022 Financial Results
Fourth Quarter and Full Year 2022 Financial Results
Slide 2: Disclaimer
DISCLAIMER Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s financial performance and future plans. Actual results may vary materially because of risks and uncertainties that are difficult to predic
Slide 3: Overview, Highlights, Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability & ESG Non-GAAP
Slide 4: Company Overview
COMPANY OVERVIEW A $28 billion annual revenue diversified international transportation services company and one of the world’s premier automotive and commercial truck retailers Over 26,500 employees Operations across four continents and nine countries Retail Automotive U.S., U.K., Germany, I
Slide 5: Investment Overview
INVESTMENT OVERVIEW Diversified business mix provides multiple opportunities for growth Operate in the highly fragmented automotive and commercial truck retail industries Retail automotive segment focused on Premium/Luxury brands which generate more than 70% of automotive revenue The largest
Slide 6: Overview, Highlights, Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability & ESG Non-GAAP
Slide 7: Q4 2022 Key Takeaways
Q4 2022 KEY TAKEAWAYS Reported Excl. F/X ($ in millions, except EPS) Revenue $7,012 $7,393 EBT $395 $403 Net Income $298 $304 Earnings Per Share $4.21 $4.30 Share repurchases: Q4: 2.5 million shares for $284.5 million Full Year 2022: 8.2 million shares for $886.5 million For 2022, completed acqu
Slide 8: Q4 and Full Year 2022 Key Highlights
Q4 AND FULL YEAR 2022 KEY HIGHLIGHTS Retail Automotive Retail Commercial Trucks Capital Allocation Same-store total units retailed of Retailed 5,704 new & used trucks, +28%; For full year 2022 completed acquisitions 102,906, +2% same-store units +22% and open points representing approx. $1.3 b
Slide 9: Q4 & 12M Performance Highlights
Q4 & 12M PERFORMANCE HIGHLIGHTS Q4 Q4 12M 12M Chg Chg ($ in Millions, except Per Share Amount) 2022 2021 2022 2021 Revenue $7,012 $6,296 +11% $27,815 $25,555 +9% Ex cl F/ X $7,393 +17% $28,824 +13% Retail Auto Same-Store Revenue $5,620 $5,432 +4% $22,274 $22,108 +1% Ex cl F/ X $5,949 +10% $23,331 +6
Slide 10: Retail Automotive Brand Mix
RETAIL AUTOMOTIVE BRAND MIX (For twelve months ended December 31, 2022) (% of Total Worldwide Automotive Dealership Revenue) 26% Premium – 71% U.S. – 1% Volume Non-U.S. – 21% CarShop – 7% 11% 11% 10% 7% 7% 7% 6% 6% 3% 3% 1% 1% 1% Other 10
Slide 11: Long Term Debt and Leverage
LONG TERM DEBT AND LEVERAGE (USD in Millions) $2,360 4 $2,500 EBITDA in 2022 = $2.1 Billion $2,000 3 $1,690 $1,622 2.9x $1,500 $1,474 2 $1,000 1.8x 1 0.8x 0.8x $500 0 $0 2019 2020 2021 2022 -$500 -1 Debt Leverage Refer to non-gaap reconciliation schedules on pages 42-45 11
Slide 12: Overview, Highlights, Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability & ESG Non-GAAP
Slide 13: Q4 2022 Revenue & EBT
Q4 2022 REVENUE & EBT Segment Segment Global Revenue Revenue Earnings Before Tax $7.0 Billion $7.0 Billion $395 Million 13% 28% 14% 64% 84% 60% 27% 2% 8% North America Retail Automotive Retail Commercial Truck United Kingdom Non-Automotive Investments & Other* Other International *Consists of non-au
Slide 14: Q4 & 12M Retail Automotive Key Metrics
Q4 & 12M RETAIL AUTOMOTIVE KEY METRICS Same-Store Q4 ’22 Q4 ’21 Chg 12M ’22 12M ’21 Chg VOLUME METRICS New Units 47,323 42,554 +11% 173,936 192,711 -10% Used Units 55,583 58,078 -4% 247,041 259,489 -5% Total Units 102,906 100,632 +2% 420,977 452,200 -7% GROSS PER UNIT New $6,573 $7,020 -6% $6,693 $5
Slide 15: Sequential Retail Automotive Key Metrics
SEQUENTIAL RETAIL AUTOMOTIVE KEY METRICS Same-Store Q1 ’22 Q2 ‘22 Q3 ‘22 Q4 ‘22 Q4 ‘21 VOLUME METRICS New Units 43,804 42,980 41,542 47,323 41,985 Used Units 65,414 66,479 62,395 55,583 55,921 Total Units 109,218 109,459 103,937 102,906 97,816 GROSS PER UNIT New $6,770 $6,851 $6,730 $6,573 $6,832 Ex
Slide 16: Retail Automotive Same-Store Revenue – Q4
RETAIL AUTOMOTIVE SAME-STORE REVENUE – Q4 ($ in Millions) CHG Q4 ’22 Q4 ’21 CHG Q4 ’22 Q4 ’21 ($) (%) Excl F/X Excl F/X ($) (%) New Vehicle $2,619 $2,324 +$295 +13% $2,747 $2,324 +$423 +18% Used Vehicle $1,909 $2,087 -$178 -9% $2,053 $2,087 -$34 -2% F&I $194 $196 -$2 -1% $203 $196 +$7 +4% Service &
Slide 17: Retail Automotive Same-Store Revenue – 12M
RETAIL AUTOMOTIVE SAME-STORE REVENUE – 12M ($ in Millions) 12M 12M 12M 12M CHG ’22 ’21 CHG ’22 ’21 ($) (%) Excl F/X Excl F/X ($) (%) New Vehicle $9,399 $9,678 -$279 -3% $9,776 $9,678 +$98 +1% Used Vehicle $8,528 $8,380 +$148 +2% $9,029 $8,380 +$649 +8% F&I $811 $770 +$41 +5% $844 $770 +$74 +10% Serv
Slide 18: PAG Performance Summary
PAG PERFORMANCE SUMMARY Q4 Total Revenue ($ in Billions) 12M Total Revenue ($ in Billions) $25.6 $27.8 $5.8 $6.3 $7.0 $20.4 Q4 ’20 Q4 ’21 Q4 ’22 12M ’20 12M ’21 12M ’22 Q4 Income ($ in Millions) 12M Income ($ in Millions) $310 $298 $200 $1,187 $1,380 $544 Q4 ’20 Q4 ’21 Q4 ’22 12M ’20 12M ’21 12M ’22
Slide 19: Stand Alone Used
STAND ALONE USED Operate stand-alone used vehicle centers across U.S./U.K. One price; no haggle approach In-store or 100% on-line Q4 ’22 Q4 ’21 Chg % 12M ‘22 12M ’21 Chg % Units 14,028 14,815 -5% 71,242 63,403 +12% Revenue ($ in Millions) $336 $394 -15% $1,726 $1,483 +16% Avg Trans Price $20,2
Slide 20: Premier Truck Group
PREMIER TRUCK GROUP Largest dealership group for Daimler Trucks N.A. Retails new and used Freightliner and Western Star Trucks 39 locations across North America Service and parts gross profit provides 65% of total gross profit in Q4 2022 5.3% return on sales in Q4 Q4 fixed cost absorptio
Slide 21: Q4 & 12M 2022 Retail Commercial Truck Key Metrics
Q4 & 12M 2022 RETAIL COMMERCIAL TRUCK KEY METRICS 12M 12M Same-Store Q4 ’22 Q4 ’21 CHG CHG ’22 ’21 VOLUME METRICS New Units 4,789 3,530 +36% 14,078 10,983 +28% Used Units 498 808 -38% 2,115 3,191 -34% TOTAL 5,287 4,388 +22% 16,193 14,174 +14% GROSS PER UNIT New $6,414 $6,471 -1% $7,225 $6,628 +9% Us
Slide 22: PTG Performance Summary
PTG PERFORMANCE SUMMARY Q4 Total Revenue 12M Total Revenue ($ in Millions) ($ in Millions) $961 $3,541 $688 $2,061 $2,466 $579 Q4 '20 Q4 '21 Q4 '22 12M '20 12M '21 12M '22 Q4 Earnings Before Taxes 12M Earnings Before Taxes ($ in Millions) ($ in Millions) $45 $51 $215 $160 $27 $78 Q4 '20 Q4 '21 Q4 '2
Slide 23: Penske Australia
PENSKE AUSTRALIA Exclusive importer and distributor of certain heavy/medium-duty trucks, buses and refuse collection vehicles; distributor of diesel/gas engines and power systems On-Highway Power Systems across Australia, New Zealand and portions of the Pacific Western Star, MAN, Dennis Eagle MT
Slide 24: Penske Transportation Solutions
PENSKE TRANSPORTATION SOLUTIONS Managed fleet of over 414,500 trucks, tractors and trailers Fleet goal of 500,000 by 2025 Q4 2022 Highlights: Revenue of $3.3 billion, +13% Record net income of $344 million, +9% Return on sales 10% PAG recorded equity income from PTS investment of $99.4
Slide 25: PTS Performance Summary
PTS PERFORMANCE SUMMARY Q4 Total Revenue 12M Total Revenue ($ in Billions) ($ in Billions) $3.0 $3.3 $13.2 $2.4 $11.2 $8.9 Q4 '20 Q4 '21 Q4 '22 2020 2021 2022 Q4 Income 12M Income ($ in Millions) ($ in Millions) $316 $344 $1,694 $1,265 $195 $569 Q4 '20 Q4 '21 Q4 '22 2020 2021 2022 25
Slide 26: PTS Earnings Contribution – Full Year 2018-2022
PTS EARNINGS CONTRIBUTION – FULL YEAR 2018 - 2022 ($ in millions) $490 $366 $165 $130 $142 2018 2019 2020 2021 2022 26
Slide 27: PTS Fleet Growth
PTS FLEET GROWTH (Units in Thousands) Managed fleet consists of trucks, tractors and trailers 414 360 327 327 297 271 247 231 205 215 201 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 27
Slide 28: PTS Strategic Opportunities
PTS STRATEGIC OPPORTUNITIES An expert voice in transportation & logistics The provider of choice for Data & Digital Alternative Autonomy Clean Energy Transportation care and use of vehicles. The provider of choice for management of supply chains. Complexity Resilience Visibility Sustainability
Slide 29: PTS Connected Data & Digital Leadership
PTS CONNECTED DATA & DIGITAL LEADERSHIP Unique Market Position Industry’s Leading Data Platform Data into Useful Digital Tools Remote Diagnostics Vehicle Recovery Proactive/Predictive Diagnostics Guided Repair 29
Slide 30: PTS Customer Applications & Tools
PTS CUSTOMER APPLICATIONS & TOOLS Penske Driver™ Meets ELD mandate for rental drivers 16,700+ unique monthly users Fleet Insight™ Fleet data in real-time and all in one place 13,500+ unique monthly users
Slide 31: Overview, Highlights, Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability & ESG Non-GAAP
Slide 32: Global Reputation Focus
GLOBAL REPUTATION FOCUS TOP-DOWN FOCUS ON EXCELLENT CUSTOMER SERVICE DRIVES POSITIVE REPUTATION SCORES U.S. FRANCHISE UNITED CARSHOP LOCATIONS KINGDOM GLOBAL 4.6 4.4 4.5 Lifetime Avg. Google Lifetime Avg. Google Lifetime Avg. Google Star Rating Star Rating Star Rating 32
Slide 33: U.S. Retail Stores Lead in Online Reputation
U.S. RETAIL STORES LEAD IN ONLINE REPUTATION 1,302 4.63 4.64 Q4 Avg. Google Q4 Avg. Google Lifetime Avg. Google Reviews per Store Star Rating per Store Star Rating per Store Top-down focus on excellent customer service and satisfaction drives high performing online reputation Over 93% of Q4 Goog
Slide 34: Vehicle Sourcing
VEHICLE SOURCING Trade/Sell Opportunities Vehicle evaluation tools available on every dealer website Trade-ins, lease returns, off-street purchases directly from consumers Self-Sourced 2022 FY U.S. Franchised 86% U.K. Franchised 86% CarShop U.S. 73% CarShop U.K. 37% 34
Slide 35: U.S. Digital Retailing
U.S. DIGITAL RETAILING Preferred Purchase Current platform on our franchise websites where an OEM solution is not yet offered Offers a hybrid model so customers can shop however they choose OEM Programs Benefit from OEM marketing Leading technology Enables “Buy online” from OEM sites Int
Slide 36: Browse – Buy – Connect (U.K.)
BROWSE – BUY – CONNECT (U.K.) Buy & Reserve Online (www.sytner.co.uk) Reserve for £99 allowing customer to choose pick-up dealership Buy online via fully integrated finance application or by card Omnichannel approach enabling customers to shop how they choose CarShop Platform (www.carshop.co.u
Slide 37: Hybrid/Electric Focus
HYBRID/ELECTRIC FOCUS Use of web platforms to educate consumers on hybrid/EV and drive business Page view traffic increased 75% over Q3 2022 Includes feature page and videos on PenskeCars.com EV ownership tips Potential incentives Dynamic charging station map Inventory links across pag
Slide 38: Online Service Appointments
ONLINE SERVICE APPOINTMENTS 520,000 online/BDC appointments scheduled in Q4 2022, +10% 37,000 service appointments made through AI 38
Slide 39: Overview, Highlights, Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability and ESG Non-GAAP
Slide 40: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) We focus our ESG efforts where we can have the most positive impact on our business and society Including issues related to: Community Participation Environmental Stainability Human Capital Investor Outreach Published our second ESG report; ww
Slide 41: Paralyzed Veterans of America
PARALYZED VETERANS OF AMERICA Partnering with PVA since 2015 PAG matches donations from customers and team to the PVA Contributed more than $8.5 MM raised through 2022 Donations go directly to supporting veterans with spinal cord injuries and diseases through specialized care, accessible veh
Slide 42: Overview, Highlights, Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability & ESG Non-GAAP
Slide 43: Consolidated Non-GAAP Reconciliations
CONSOLIDATED NON-GAAP RECONCILIATIONS The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and twelve months ended December 31, 2022 and 2021 ($ in millions, except
Slide 44: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and adjusted EBITDA for the three and twelve months ended December 31, 2022 and 2021 Three Months Ended ($ in Millions) December
Slide 45: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA and Leverage Ratio as of December 31, 2022, 2021, 2020 and 2019 ($ in Millions) 12M ‘22 12M ’21 12M ’20 12M ‘19 Net Income $1,386.2 $1,192.7 $ 545.3 $ 435.1 Add: Depreciation $127.3 $ 121.5 $ 115.5
Slide 46: FENSKE
FENSKE
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